Congratulations to all of us for owning a piece of American history - America’s oldest traditional underground gold mining company. The enclosed stock certificate represents two additional shares for each share you owned prior to the close of business on October 12, 2001. Increasing the shares we each own was a necessary step along a strategically planned path of building value for the twenty-first century and preserving a shrinking American gold industry. While the decision to split an inexpensive stock is unusual, it allows us to become proactive in regressive times for gold mining.
The cost of implementing the split was slightly over $25.00 per shareholder (there are 1,000 of us holding stock). During our current financial times, I am asking each shareholder to cover this direct cost by sending the company $25.00. Your payment is needed to replenish working capital we used to complete the stock distribution.
As a bonus for your support, the gold sales department is offering each shareholder a 20% discount on your next purchase of gold specimens, jewelry, mine bars and other items. Although the discount has no time limit, it is a great way to do your holiday shopping. If not use the discount at our shareholder’s meeting June 22, 2002. We appreciate your immediate response.
The Company is experiencing a dismal year financially. I detailed our cash flow problems in June at the shareholder’s meeting. I stated that PG&E increased our electricity cost. The rate increase was also retroactive which further impacts our cash flow. I cannot fault our poor financial condition on the spot price of gold. Our issue is internal, not external. While costs greater than revenue are driving issues, our biggest problem has been the lack of mining gold. Gold production throughout the year has been disappointing. Our targets are geologically sound and the work is diligently performed. Unfortunately, the crew’s effort has not produced the expected result. The gold has been sparse.
The vagaries of being part of a high-grade gold mining operation remain as true and consistent as in the past. I assure you that our company will survive, grow and prosper; however, I am unable to predict or guarantee when this will occur.
P.S. Due to the lack of participation, the Stock Purchase Plan for Shareholders of Record will be closed on January 1, 2002. If you have participated in the past and have a cash remainder in your account, it will be mailed to you with your stock certificate after January 1, 2002.
Michael M. Miller
President & CEO